Pacific Gas and Electric Company

-:5 93

1 RICHARD C. JOSEPHSON, OSB NO. 73374 (Pro hac vice) 2 STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 3 Portland, OR 97204-1268 Telephone: (503) 224-3380 4 Facsimile: (503) 220-2480

5 EDGAR B. WASHBURN, Bar No. 34038 WASHBURN, BRISCOE & MCCARTHY, P.C. 6 55 Francisco Street, Suite 600 San Francisco, Ca 94133 7 Telephone: (415) 421-3200 Facsimile: (415) 421-5044 8 AtresfrPcfcLme opnat.irri Attorneys for Pacific Lumber Company, a Ualifornma 9 corporation

1 naUNITED STATES BANKRUPTCY COURT

11 NORTHERN DISTRICT OF CALIFORNIA

12 SAN FRANCISCO DIVISION NO. 01-30923 DM 13 In re: Chapter 11 Case 14 PACIFIC GAS & ELECTRIC COMPANY, a California corporation, Date: June 20, 2001 15 1:30 p.m. Debtor. Time: Place: 235 Pine Street, 22nd Floor 16 San Francisco, California Federal I.D. No. 94-0742640 17 18 19 PROOF OF SERVICE 20 I hereby certify that I served the foregoing Notice of Motion and Motion for Relief 21 From Stay, Declaration of Gary Clark in Support of Motion for Relief From Stay and 22 For Relief From Stay via 23 Declaration of Richard C. Josephson in Support of Motion 24 messenger to the United States Bankruptcy Court, Attn: PG&E Administrator, 235 Pine Street,

25 f,

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STOEL RIVES LLP 1 - PROOF OF SERVICE ATTORNEYS 900 SW FIFTH AVENUE, SUITE 2600 PORTLAND. OREGON 97204-1268 Telephone (503) 224-3380 7 Portlndl-207284 .1 0011155-00001 1 Nineteenth Floor San Francisco, CA 94104 on May 9, 2001 and via first class mail to said

2 persons listed on the attached service list on May 10, 2001.

DATED: May 10, 2001. 4 5 Ricl•rard C.-Josephson/ Attorneys fo PafcLLOf erCopn

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8 9

10 11 12 13

14 15 16 17 18

20 21 22 23

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2 - PROOF OF SERVICE STOELATTORNEYS RIVES LLP 900 SW FIFTH AVENUE SUITE 2600 PORTLAND, OREGON 97204-1268 Telephone (503) 224-3380 7 Portlndl-207284 .1 0011155-00001 11155/1 RCJ 11155/1 RCJ

[Counsel for El Paso] [Counsel for Idaho Power]

Adam A. Lewis Adam A. Lewis Morrison & Foerster Morrison & Foerster 425 Market Street, 33rd Floor 425 Market Street, 33rd Floor San Francisco, CA 94105 San Francisco, CA 94105

RCJ 11155/1 RCJ 11155/1

Adrienne Vadell Sturges [Counsel for Sempra Energy Trading Corp] Sodexho Marriott Services, Inc. 9801 WAian Boulevard, 12th Floor Alan Z. Yudowsky Gaithersburg, MD 20878 Anne E. Wells Stroock & Stroock & Lavan LLP 2029 Century Park East, Suite 1800 Los Angeles, CA 90067

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Alex Makler Arlen Orchard Calpine Corporation Sacramento Municipal Utility District 6700 Koll Center Parkway, Suite 200 6201 S. Street, Mail Stop B408 Pleasanton, CA 94566 Sacramento, CA 95817 RCA 11155/1 RCJ 11155/1

[Counsel for MBIA Insurance Corporation] [Counsel for Phil Franey, Treasurer/Tax Collector for Kern County] Aron Mark Oliner Barmann, Sr. Buchalter, Nemer, Fields & Younger, A B.C. Professional Corporation County Counsel Deputy 333 Market Street, 29th Floor Attn: Jerri S. Bradley, Avenue, Fourth Floor San Francisco, CA 94105 1115 Truxtun Bakersfield, CA 93301

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Bank of America National Trust and Savings Bank of America National Trust and Savings Association Association Attn: Peggie Sanders CA5-705-12-10 1850 Gateway Boulevard Attn: Adeline Tourunian 555 CA Street, 12th Floor Concord, CA 94520 San Francisco, CA 94104

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Bank of America Bank of America, Admin. Agent Kemerait Attn: Clara Strand Attn: Katherine Bank of America 555 South Flower Street 12th Floor Mail Code CA9-706-11-21 555 CA Street, Francisco, CA 94104-1502 Los Angeles, CA 90071 San RCJ 11155/1 RCJ 11155/11

Bank of America, N.A. Bank One Admin. Agent Corporate Trust Administration Kathrine Kemerait Attn: Janice Ott Rotunno 555 CA Street, 12th Floor Mail Code ILI-0126 San Francisco, CA 94104-1502 1 Bank One Plaza Chicago, IL 60670-0126

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Bank One, NA Bankers Trust Co. of CA, NA Attn: Robert G. Bussa, Jane Bek Structured Finance Group Energy & Utilities Attn: Peter Becker Mail Code IL 1-0363 4 Albany St., 10th Floor Bank One Plaza New York, NY 10006 Chicago, IL 60670

RCJ RCJ 11155/1 11155/1

Bankers Trust Co. Bankers Trust Company Trustee Corp. Trust Corporate Trust Services Safet Kalabovic Attn: Safet Kalabovic 4 Albany Street, 4th Floor 4 Albany Street, 4th Floor New York, NY 10006 New York, NY 10006 RCJ 11155/1 RCJ 1115511

Banque Nationale de Paris [Attorney for CA Power Exchange] San Francisco Branch Attn: Debra Wright Ben Whitwell 180 Montgomery St., 4th Floor Whitwell & Emhoff LLP San Francisco, CA 94104 202 N. Canon Drive Beverly Hills, CA 90210

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[Counsel for Enron North America Corp and Beth Smayda, Director Enron Canada Corp.] MBIA Insurance Corporation 113 King Street Bennett G. Young Armonk, NY 10504 LeBoeuf, Lamb, Greene & MacRae, LLP One Embarcadero Center, Suite 400 San Francisco, CA 94111

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BMO Nesbitt Burns BNY Western Trust Company Attn: John Harche Attn: Rose Ruelos, Corp. Trust Administration 700 Louisiana, Suite 4400 550 Kearny St., Suite 600 Houston, TX 77002 San Francisco, CA 94108-2527 11155/11 RCJ 11155/1 RCJ

BNY Western Trust Company BP Energy Co Attn: Rose Ruelos, Corp. Trust Administration Attn: Louis Anderson 550 Kearny St., Suite 600 501 Westlake Park Blvd San Francisco, CA 94108-2527 Houston, TX 77079

RCJ RCJ 11155/1 1115511

BP Energy Company [Counsel for Mirant Corporation] Attn: Ken McClanahan 501 Westlake Park Boulevard Brian L. Holman Houston, TX 77079 White & Case LLP 633 West Fifth Street, 19th Floor Los Angeles, CA 90071

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[Counsel for Sempra and Southern CA Gas Company] (Attorney for Bank of America, Admin. Agent)

Bruce Bennett, Esq. Bryan Krakauer, Esq. Bennett J. Murphy, Esq. Hennigan Bennett & Dorman Sidley & Austin 601 South Figueroa St., Suite 3300 One First National Plaza Los Angeles, CA 90017 Chicago, IL 60603 RCJ 11155/1 RCJ 11155/11

Bryant Danner CA Farm Bureau Federation Southern CA Edison 2300 River Plaza Drive 2244 Walnut Grove Ave. Sacramento, CA 95833 Rosemead, CA 91770

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CA Independent System Op. CA Independent System Operator William Regan Attn: Margaret A. Rostlcer P.O. Box 639014 4151 Blue Ravine Rd. Folsom, CA 95630-9017 Folsom, CA 95630

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CA Power Exchange CA Power Exchange Attn: Don Deach Attn: Lynn Miller 100 S. Freemont Ave., Bldg. A9 2000 S. Los Robles Avenue Alhambra, CA 91803-4737 Suite 400 Pasadena, CA 91101-2482 RCJ 11155/1 RCJ 11155/11

CA Power Exchange (Attorney for CA Public Utilities Lynn Miller Commission) 100 S. Freemont Avenue, Bldg A9 Alhambra, CA 91803-4737 CA Public Utilities Commission Alan Kornberg, Esq. Paul, Weiss, Riflcind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064

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CA Public Utilities Commission CA State Board of Equalization Attn: General Counsel PO Box 942879 505 Van Ness Avenue Sacramento, CA 94279-8063 San Francisco, CA 94102

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Calpine Gilroy Cogeneration LP Calpine Greenleaf Inc. Robert Brown 465 CA St. #600 6700 Koll Center Plcy #200 San Francisco, CA 94104 San Jose, CA 94566 RCJ 1115511 RCJ 11155/1

Calpine King City Cogen LLC Calpine Pittsburg Power Plant Robert Brown Zahir Ahmadi 6700 Kill Center Plcy #200 50 W. San Fernando St. San Jose, CA 94568 San Jose, CA 95113

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[Counsel for Enron North America Corp and [Counsel for Unofficial Committee of Pacific Gas & Bondholders] Enron Canada Corp.] Electric Company First Mortgage Chaim J. Fortgang, Esq. Carl A. Eklund Richard G. Mason, Esq. LeBoeuf, Lamb, Greene & MacRae, LLP Wachtell, Lipton, Rosen & Katz 125 West 55th Street 51 West 52nd Street New York, NY 10019 New York, NY 10019

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Chevron U.S.A. Production Co. Christine C. Yokan P.O. Box 840659 General Electric Capital Business Dallas, TX 75284-0659 Asset Funding Corp. 10900 N.E. 4th Street, Suite 500 Bellevue, WA 98004 11155/1 RCJ 11155/1 RCJ

Christopher Beard Coast Energy Canada Ins. Beard & Beard Attn: Caroline Pitre 306 N. Market Street 444-7th Avenue S.W., Suite 700 Frederick, MD 21701 Calgary, Alberta Canada T2P 0X8

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Coast Energy Group, A Division of Cornerstone Cools Inlet Energy Supply Propane, L.P. Attn: Hans 0. Saeby Attn: Ruben Alonso 10100 Santa Monica Blvd., 25th Floor 1600 Highway 6, Suite 400 Los Angeles, CA 90067 Sugarland, TX 77478

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[Counsel for Reliant Energy, Inc.] [Counsel for Interested Party, Department of Water and Power] David A. Burns Baker Botts LLP David A. Gill One Shell Plaza Richard K. Diamond LLP 910 Loiusiana Danning, Gill, Diamond & Kollitz Third Floor Houston, TX 77002 2029 Century Park East, Los Angeles, CA 90067

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[Counsel for Corestaff Services (CA), Inc.] [Counsel for Cook Inlet Energy Supply]

David J. Hankey David L. Ronn Gohn, Hanleu & Stichel LLP Mayer, Brown & Platt Suite 1520, The Fidelity Building 700 Louisiana, Suite 3600 210 North Charles Street Houston, TX 77002 Baltimore, MD 21201

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[Counsel for CA Independent System Operator, Inc.] [Attorney for CA Independent System Operator]

David Neale David Neale Brill LLP Rankin & Brill LLP Levene, Neale, Bender, Rankin Levene, Neale, Bender, 1120 Avenue of the Stars, Suite 1120 1801 Avenue of the Stars, Suite 1801 CA 90067 Los Angeles, CA 90067 Los Angeles, RCJ 11155/1 RCJ 1115511

[Counsel for Bank of Montreal] Department of Justice U.S. Attorney's Office David T. Biderman 450 Golden Gate Avenue Perkins Coie LLP Box 36055 1620 26th Street, Sixth Floor San Francisco, CA 94102 Santa Monica, CA 90404-4013

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Deutsche Bank AG Deutsche Bank AG NY Branch NY Branch Attn: E.S. Medla Attn: John Quinn 31 West 52nd Street 31 West 52nd Street New York, NY 10019 New York, NY 10019

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DK Acquisition Partners, L.P. [Counsel for Arizona Public Service Co.] c/o M.H. Davidson & Co. Don Gaffney Attn: Tony Yoseloff Snell & Wilmer LLP 885 Third Avenue, Suite 3300 One Arizona Center New York, NY 10022 400 East Van Buren Phoenix, AZ 85004 1115511 RCJ 11155/1 RCJ

Duane H. Nelsen [Counsel for Williams Energy Services and Williams GWF Power Systems Company, Inc. Energy Marketing] 4300 Railroad Ave. Dulcie D. Brand Pittsburgh, CA 94565-6006 Ricky L. Shackelford James L. Poth Jones Day Reavis & Pogue 555 West Fifth Street, Suite 4600 Los Angeles, CA 90013

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Dynergy Canada Marketing & Trade Dynergy Marketing & Trade Attn: Steve Barron Attn: Steve Barron 350 - 7th Avenue S.W. 1100 Louisiana Street, Suite 5800 Calgary, Alberta Houston, TX 77002 Canada, T2P 3N9

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[Counsel for CA Independent System Operator, Inc.] El Paso Merchant Energy Gas LP Darrel Rogers Edwin Berlin 2500 City West Blvd., Suite 1400 Richard Wyron Swidler Berlin Shereff Friedman, LLP Houston, TX 77042 3000 K Street, N.W. Washington, D.C. 20007 RCJ 11155/1 RCJ 1115511

El Paso Merchant Energy, L.P. [Counsel for City of Santa Clara] Attn: John Harrison 1010 Travis Street Elaine M. Seid LLP Houston, TX 77002 McPharlin, Sprinkles & Thomas 10 Alamaden Boulevard, Suite 1460 San Jose, CA 95113

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Enron Canada Corporation Evan C. Hollander 3500 Canterra Tower White & Case LLP 400 3rd Ave. S.W. 1155 Avenue of the Americas Calgary, AB T2P 4H2 New York, NY 10036 Canada

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[Counsel for BNY] [Counsel for Corestaff Services (CA), Inc.]

Evelyn H. Biery Evan Hollander Corestaff Services (CA), Inc. White & Case Fulbright & Jaworski LLP 1155 Avenue of the Americas 1301 McKinney, Suite 5100 New York, NY 10036 Houston, TX 77010 RCJ 11155/1 RCJ 1115511

Fernando De Leon Franchise Tax Board Attorney at Law PO Box 942857 CA Energy Commission Sacramento, CA 94257-2021 1516 9th Street, MS-14 Sacramento, CA 95814

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[Counsel for City of Palo Alto and its municipality utility] [Counsel for Certain Underwriters at Lloyd's and Interested Insurance Companies] G. Larry Engel Roberto J. Kampfner Gary P. Blitz LLP Brobecic, Phleger & Harrison Piper Marbury Rudnick & Wolfe LLP One Market Spear Street Tower 1200 19th Street, N.W. San Francisco, CA 94105 Washington, D.C. 20036

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Geysers Power Company LLC [Counsel for GE Power Systems and GE Supply Joe McClendon Divisions] 6700 Koll Center Pky #200 Glenn M. Reisman Pleasanton, CA 94566 Two Corporate Drive P.O. Box 861 Shelton, CT 06484 RCJ 11155/1 RCJ 1115511

[Counsel for AES New Energy, Inc.] Grant Kolling City of Palo Alto Gordon P. Erspamer P.O. Box 10250 Morrison & Foerster LLP Palo Alto, CA 94303 101 Ygnacio Valley Road, Suite 450 P.O. Box 8130 Walnut Creek, CA 94595

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Gregory W. Jones GWF Power Systems LP El Paso Merchant Energy 4300 Railroad Ave. 1001 Louisiana, Suite 2754B Pittsburg, CA 94565 Houston, TX 77002

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[Counsel for Indenture Trustee for 7.90% Deferrable Interest Heather Brown Subordinated Debendures Series A] Williams Energy Marketing and Trading Co. Harold L. Kaplan One Williams Center, Suite 4100 Jeffrey M. Schwartz Tulsa, OK 74172 Mark F. Hebbeln Gardner, Carton & Douglas 321 North Clark Street, 34th Floor Chicago, IL 60610 RCJ 11155/1 RCJ 1115511

[Counsel for Corestaff Services (CA), Ins.] [Counsel for Powerex Corp.]

Heinz Binder Howard J. Weg Robert G. Harris Peitzman, Glassman & Weg Binder & Malter 1900 Avenue of the Stars, Suite 650 2775 Park Avenue Los Angeles, CA 90067 Santa Clara, CA 95050

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[Counsel for Constellation Power Source, Ins.] ICC Energy Corporation Attn: Karl Butler Hydee R. Feldstein Street, Suite 500 Katherine A. Traxler 302 N. Market Kelly Aran' Dallas, TX 75202-1846 Paul, Hastings, Janofsky & Walker LLP Twenty Third Floor 555 South Flower Street Los Angeles, CA 90071

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Internal Revenue Service Internal Revenue Service Fresno, CA 93888 Spec Proc / Bankruptcy 1301 Clay Street, Suite 1400 Oakland, CA 94612 RCJ 11155/1 RCJ 1115511

[Counsel for party in interest] [Counsel for United States of America] J. Christopher Kohn J. Christopher Kennedy Tracy J. Whitaker Irell & Manella LLP Brendan Collins 1800 Avenue of the Stars, 9th Floor Civil Division Los Angeles, CA 90067 Department of Justice P.O. Box 875 Ben Franklin Station Washington, D.C. 20044

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[Counsel for United States of America] [Counsel for Tucson Electric Power Company]

J. Christopher Kohn J. Matthew Derstein Tracy J. Whitaker Roshka Heyman & DeWulf PLC Brendan Collins Two Arizona Center Department of Justice 400 North 5th Street, Suite 1000 1100 L Street, N.W. Room 10004 Phoenix, AZ 85004 Washington, D.C. 20005

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[Counsel for Bank of Montreal] James R. Thompson Idaho Power Company James E. Till, Esq. 1221 W. Idaho Street Perkins Coie LLP Boise, ID 83702 1211 SW Fifth Ave., Suite 1500 Portland, OR 97204 RCJ 11155/1 RCJ 1115511

[Proposed Investment Banker to Committee] [Counsel for International Brotherhood of Electrical Workers, Local 47 and Local 1245] Jeffrey M. Wilson Saybrook Capital LLC Jeffry A. Davis 303 Twin Dolphin Drive, Suite 600 Gray Cary Ware & Freidenrich LLP Redwood City, CA 94065 401 B Street, Suite 1700 San Diego, CA 92101

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JoAnn P. Russell [Counsel for Carriage Homes, Inc.] Duke Energy Trading and Marketing LLC 10777 Westheimer, Suite 650 John F. Shellabarger Houston, TX 77042 Carriage Homes, Inc. Law Offices of John F. Shellabarger 928 Garden Street, Suite 3 Santa Barbara, CA 93101

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[Counsel for Enron North America Core and Enron John P. Dillman Canada Corp.] Linerbarger Heard Goggan Blair Graham Pena & Sampson, LLP John G. Klaugberg P.O. Box 3064 LeBoeuf, Lamb, Greene & MacRae, LLP Houston, TX 77253 125 West 55th Street New York, NY 10019

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[Counsel for El Paso] [Counsel for Idaho Power]

Adam A. Lewis Adam A. Lewis Morrison & Foerster Morrison & Foerster 425 Market Street, 33rd Floor 425 Market Street, 33rd Floor San Francisco, CA 94105 San Francisco, CA 94105

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[Counsel for MBIA Insurance Corporation] [Counsel for Phil Franey, Treasurer/Tax Collector for Kern County] Aron Mark Oliner Buchalter, Nemer, Fields & Younger, A B.C. Barmann, Sr. Professional Corporation County Counsel 333 Market Street, 29th Floor Attn: Jerri S. Bradley, Deputy San Francisco, CA 94105 1115 Truxtun Avenue, Fourth Floor Bakersfield, CA 93301

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Bank of America National Trust and Savings Bank of America National Trust and Savings Association Association Attn: Peggie Sanders CA5-705-12-10 1850 Gateway Boulevard Attn: Adeline Tourunian Concord, CA 94520 555 CA Street, 12th Floor San Francisco, CA 94104

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Bank of America Bank of America, Admin. Agent Attn: Clara Strand Attn: Katherine Kemerait 555 South Flower Street Bank of America Mail Code CA9-706-11-21 555 CA Street, 12th Floor Los Angeles, CA 90071 San Francisco, CA 94104-1502 RCJ 11155/1 RCJ 1115511

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[Counsel for Sempra and Southern CA Gas Company] (Attorney for Bank of America, Admin. Agent)

Bryant Danner CA Farm Bureau Federation Southern CA Edison 2300 River Plaza Drive 2244 Walnut Grove Ave. Sacramento, CA 95833 Rosemead, CA 91770

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CA Independent System Op. CA Independent System Operator William Regan Attn: Margaret A. Rostlcer P.O. Box 639014 4151 Blue Ravine Rd. Folsom, CA 95630-9017 Folsom, CA 95630

RCJ RCJ 1115511 11155/1

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CA Public Utilities Commission CA State Board of Equalization Attn: General Counsel PO Box 942879 505 Van Ness Avenue Sacramento, CA 94279-8063 San Francisco, CA 94102

RCJ 11155/1 RCJ 11155/1

Calpine Gilroy Cogeneration LP Calpine Greenleaf Inc. Robert Brown 465 CA St. #600 6700 Koll Center Plcy #200 San Francisco, CA 94104 San Jose, CA 94566 RCJ 11155/1 RCJ 11155/1

Calpine King City Cogen LLC Calpine Pittsburg Power Plant Robert Brown Zahir Ahmadi 6700 Kill Center PIcy #200 50 W. San Fernando St. San Jose, CA 94568 San Jose, CA 95113

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[Counsel for Enron North America Corp and [Counsel for Unofficial Committee of Pacific Gas & Electric Company First Mortgage Bondholders] Enron Canada Corp.] Chaim J. Fortgang, Esq. Carl A. Eklund Richard G. Mason, Esq. LeBoeuf, Lamb, Greene & MacRae, LLP Wachtell, Lipton, Rosen & Katz 125 West 55th Street 51 West 52nd Street New York, NY 10019 New York, NY 10019

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Christopher Beard Coast Energy Canada Ins. Beard & Beard Attn: Caroline Pitre 306 N. Market Street 444-7th Avenue S.W., Suite 700 Frederick, MD 21701 Calgary, Alberta Canada T2P 0X8

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[Counsel for Tucson Electric Power Company] Crocket Cogen A CA Limited Partnership Craig H. Millet Keith Richards Gibson Dunn & Crutcher LLP 135 S. LaSalle Street, #1960 Jamboree Center Chicago, IL 60603 4 Park Plaza, Suite 1400 Irvine, CA 92614 RCJ 1115511 RCJ 1115511 rCounsel for Reliant Energy, Inc.] [Counsel for Interested Party, Department of Water and Power] David A. Burns Baker Botts LLP David A. Gill One Shell Plaza Richard K. Diamond 910 Loiusiana Danning, Gill, Diamond & Kollitz LLP Houston, TX 77002 2029 Century Park East, Third Floor Los Angeles, CA 90067

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[Counsel for Corestaff Services (CA), Inc.] [Counsel for Cook Inlet Energy Supply]

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[Counsel for CA Independent System Operator, Inc.] [Attorney for CA Independent System Operator]

David Neale David Neale Levene, Neale, Bender, Rankin & Brill LLP Levene, Neale, Bender, Rankin Brill LLP 1801 Avenue of the Stars, Suite 1120 1801 Avenue of the Stars, Suite 1120 Los Angeles, CA 90067 Los Angeles, CA 90067 RCJ 11155/1 RCJ 11155/1

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Deutsche Bank AG Deutsche Bank AG NY Branch NY Branch Attn: E.S. Medla Attn: John Quinn 31 West 52nd Street 31 West 52nd Street New York, NY 10019 New York, NY 10019

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El Paso Merchant Energy, L.P. [Counsel for City of Santa Clara] Attn: John Harrison 1010 Travis Street Elaine M. Seid Houston, TX 77002 McPharlin, Sprinkles & Thomas LLP 10 Alamaden Boulevard, Suite 1460 San Jose, CA 95113

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Enron Canada Corporation Evan C. Hollander 3500 Canterra Tower White & Case LLP 400 3rd Ave. S.W. 1155 Avenue of the Americas Calgary, AB T2P 4H2 New York, NY 10036 Canada

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[Counsel for BNY] [Counsel for Corestaff Services (CA), Inc.]

Fernando De Leon Franchise Tax Board Attorney at Law PO Box 942857 CA Energy Commission Sacramento, CA 94257-2021 1516 9th Street, MS-14 Sacramento, CA 95814

RCJ 11155/1 RCJ 11155/1

[Counsel for City of Palo Alto and its municipality utility] [Counsel for Certain Underwriters at Lloyd's and Interested Insurance Companies] G. Larry Engel Roberto J. Kampfner Gary P. Blitz Brobeclc, Phleger & Harrison LLP Piper Marbury Rudnick & Wolfe LLP One Market Spear Street Tower 1200 19th Street, N.W. San Francisco, CA 94105 Washington, D.C. 20036

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Gregory W. Jones GWF Power Systems LP El Paso Merchant Energy 4300 Railroad Ave. 1001 Louisiana, Suite 2754B Pittsburg, CA 94565 Houston, TX 77002

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[Counsel for Corestaff Services (CA), Ins.] [Counsel for Powerex Corp.]

Heinz Binder Howard J. Weg & Weg Robert G. Harris Peitzman, Glassman of the Stars, Suite 650 Binder & Malter 1900 Avenue 90067 2775 Park Avenue Los Angeles, CA Santa Clara, CA 95050

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[Counsel for Constellation Power Source, Ins.] ICC Energy Corporation Attn: Karl Butler Hydee R. Feldstein 302 N. Market Street, Suite 500 Katherine A. Traxler Kelly Aran Dallas, TX 75202-1846 Paul, Hastings, Janofsky & Walker LLP Twenty Third Floor 555 South Flower Street Los Angeles, CA 90071

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Internal Revenue Service Internal Revenue Service Fresno, CA 93888 Spec Proc / Bankruptcy 1301 Clay Street, Suite 1400 Oakland, CA 94612 RCJ 11155/1 RCJ 11155/1

[Counsel for party in interest] [Counsel for United States of America]

J. Christopher Kohn J. Christopher Kennedy Tracy J. Whitaker Irell & Manella LLP Brendan Collins 1800 Avenue of the Stars, 9th Floor Civil Division Los Angeles, CA 90067 Department of Justice P.O. Box 875 Ben Franklin Station Washington, D.C. 20044

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[Counsel for United States of America] [Counsel for Tucson Electric Power Company]

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[Counsel for Enron North America Core and Enron John P. Dillman Canada Corp.] Linerbarger Heard Goggan Blair Graham Pena & Sampson, LLP John G. Klaugberg P.O. Box 3064 LLP LeBoeuf, Lamb, Greene & MacRae, Houston, TX 77253 125 West 55th Street New York, NY 10019 I 1115511 RCJ 11155/1 RCJ

[Counsel for El Paso] [Counsel for Idaho Power]

Adam A. Lewis Adam A. Lewis Morrison & Foerster Morrison & Foerster 425 Market Street, 33rd Floor 425 Market Street, 33rd Floor San Francisco, CA 94105 San Francisco, CA 94105

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Bank of America National Trust and Savings Bank of America National Trust and Savings Association Association Attn: Peggie Sanders CA5-705-12-10 1850 Gateway Boulevard Attn: Adeline Tourunian Concord, CA 94520 555 CA Street, 12th Floor San Francisco, CA 94104

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[Counsel for Sempra and Southern CA Gas Company] (Attorney for Bank of America, Admin. Agent)

Bruce Bennett, Esq. Bennett J. Murphy, Esq. Bryan Krakauer, Esq. Hennigan Bennett & Dorman Sidley & Austin 601 South Figueroa St., Suite 3300 One First National Plaza Los Angeles, CA 90017 Chicago, IL 60603 11155/11 RCJ 11155/1 RCJ

Bryant Danner CA Farm Bureau Federation Southern CA Edison 2300 River Plaza Drive 2244 Walnut Grove Ave. Sacramento, CA 95833 Rosemead, CA 91770

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CA Independent System Op. CA Independent System Operator William Regan Attn: Margaret A. Rostlcer P.O. Box 639014 4151 Blue Ravine Rd. Folsom, CA 95630-9017 Folsom, CA 95630

RCJ 11155/1 RCJ 11155/1

CA Public Utilities Commission CA State Board of Equalization Attn: General Counsel PO Box 942879 505 Van Ness Avenue Sacramento, CA 94279-8063 San Francisco, CA 94102

RCJ 11155/1 RCO 11155/1

Calpine Gilroy Cogeneration LP Calpine Greenleaf Inc. Robert Brown 465 CA St. #600 6700 Koll Center Plcy #200 San Francisco, CA 94104 San Jose, CA 94566 RCJ 11155/1 RCJ 11155/11

Calpine King City Cogen LLC Calpine Pittsburg Power Plant Robert Brown Zahir Ahmadi 6700 Kill Center PIcy #200 50 W. San Fernando St. San Jose, CA 94568 San Jose, CA 95113

RCJ 11155/1 RCJ 11155/1

[Counsel for Enron North America Corp and [Counsel for Unofficial Committee of Pacific Gas & Enron Canada Corp.] Electric Company First Mortgage Bondholders) Chaim J. Fortgang, Esq. Carl A. Eklund Richard G. Mason, Esq. LeBoeuf, Lamb, Greene & MacRae, LLP Wachtell, Lipton, Rosen & Katz 125 West 55th Street 51 West 52nd Street New York, NY 10019 New York, NY 10019

RCJ 1115511 RCJ 11155/1

Christopher Beard Coast Energy Canada Ins. Beard & Beard Attn: Caroline Pitre 306 N. Market Street 444-7th Avenue S.W., Suite 700 Frederick, MD 21701 Calgary, Alberta Canada T2P 0X8

RCJ 11155/1 RCJ 11155/1

[Counsel for Reliant Energy, Inc.] [Counsel for Interested Party, Department of Water and Power] David A. Burns Baker Botts LLP David A. Gill One Shell Plaza Richard K. Diamond 910 Loiusiana Danning, Gill, Diamond & Kollitz LLP Houston, TX 77002 2029 Century Park East, Third Floor Los Angeles, CA 90067

RCJ RCJ 11155/1 11155/1

[Counsel for Corestaff Services (CA), Inc.] [Counsel for Cook Inlet Energy Supply]

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[Counsel for CA Independent System Operator, Inc.] [Attorney for CA Independent System Operator]

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Deutsche Bank AG Deutsche Bank AG NY Branch NY Branch Attn: E.S. Medla Attn: John Quinn 31 West 52nd Street 31 West 52nd Street New York, NY 10019 New York, NY 10019

RCJ 11155/1 RCJ 11155/1

[Counsel for CA Independent System Operator, Inc.] El Paso Merchant Energy Gas LP Darrel Rogers Edwin Berlin Richard Wyron 2500 City West Blvd., Suite 1400 Swidler Berlin Shereff Friedman, LLP Houston, TX 77042 3000 K Street, N.W. Washington, D.C. 20007 1115511 RCJ 11155/1 RCJ

El Paso Merchant Energy, L.P. rCounsel for City of Santa Clara] Attn: John Harrison 1010 Travis Street Elaine M. Seid Houston, TX 77002 McPharlin, Sprinkles & Thomas LLP 10 Alamaden Boulevard, Suite 1460 San Jose, CA 95113

RCJ 11155/1 RCJ 11155/1

Enron Canada Corporation Evan C. Hollander 3500 Canterra Tower White & Case LLP 400 3rd Ave. S.W. 1155 Avenue of the Americas Calgary, AB T2P 4H2 New York, NY 10036 Canada

RCJ 11155/1 RCJ 11155/1

[Counsel for BNY] [Counsel for Corestaff Services (CA), Inc.]

Fernando De Leon Franchise Tax Board Attorney at Law PO Box 942857 CA Energy Commission Sacramento, CA 94257-2021 1516 9th Street, MS-14 Sacramento, CA 95814

RCJ 11155/1 RCJ 11155/1

[Counsel for City of Palo Alto and its municipality utility] [Counsel for Certain Underwriters at Lloyd's and Interested Insurance Companies] G. Larry Engel Roberto J. Kampfner Gary P. Blitz Brobeclc, Phleger & Harrison LLP Piper Marbury Rudnick & Wolfe LLP One Market Spear Street Tower 1200 19th Street, N.W. San Francisco, CA 94105 Washington, D.C. 20036

RCJ 11155/1 RCJ 11155/1

Gregory W. Jones GWF Power Systems LP El Paso Merchant Energy 4300 Railroad Ave. 1001 Louisiana, Suite 2754B Pittsburg, CA 94565 Houston, TX 77002

RCJ 11155/1 RCJ 11155/1

[Counsel for Indenture Trustee for 7.90% Deferrable Interest Heather Brown Subordinated Debendures Series A] Williams Energy Marketing and Trading Co. Harold L. Kaplan One Williams Center, Suite 4100 Jeffrey M. Schwartz Tulsa, OK 74172 Mark F. Hebbein Gardner, Carton & Douglas 321 North Clark Street, 34th Floor Chicago, IL 60610 RCJ 11155/1 RCJ 1115511

[Counsel for Corestaff Services (CA), Ins.] [Counsel for Powerex Corp.]

Heinz Binder Howard J. Weg Robert G. Harris Peitzman, Glassman & Weg Binder & Malter 1900 Avenue of the Stars, Suite 650 2775 Park Avenue Los Angeles, CA 90067 Santa Clara, CA 95050

RCJ 11155/1 RCJ 11155/1

[Counsel for Constellation Power Source, Ins.] ICC Energy Corporation Attn: Karl Butler Hydee R. Feldstein 302 N. Market Street, Suite 500 Katherine A. Traxler Kelly Aran Dallas, TX 75202-1846 Paul, Hastings. Janofsky & Walker LLP Twenty Third Floor 555 South Flower Street Los Angeles, CA 90071

11155/1 RCJ 11155/1 RCJ

Internal Revenue Service Internal Revenue Service Fresno, CA 93888 Spec Proc / Bankruptcy 1301 Clay Street, Suite 1400 Oakland, CA 94612 RCJ 11155/1 RCJ 1115511

[Counsel for party in interest] [Counsel for United States of America]

RCJ 11155/1 RCJ 11155/1I

[Counsel for United States of America] [Counsel for Tucson Electric Power Company]

RCJ 11155/1 RCJ 11155/1

[Proposed Investment Banker to Committee] [Counsel for International Brotherhood of Electrical Workers, Local 47 and Local 1245] Jeffrey M. Wilson Saybrook Capital LLC Jeffry A. Davis Gray Cary Ware & Freidenrich LLP 303 Twin Dolphin Drive, Suite 600 401 B Street, Suite 1700 Redwood City, CA 94065 San Diego, CA 92101

RCJ 11155/1 RCJ 11155/1

for Carriage Homes, Inc.] JoAnn P. Russell [Counsel Duke Energy Trading and Marketing LLC John F. Shellabarger 10777 Westheimer, Suite 650 Carriage Homes, Inc. Houston, TX 77042 Law Offices of John F. Shellabarger 928 Garden Street, Suite 3 Santa Barbara, CA 93101

11155/1 RCJ 11155/1 RCJ

for Enron North America Core and Enron John P. Dillman [Counsel Blair Canada Corp.] Linerbarger Heard Goggan Graham Pena & Sampson, LLP John G. Klaugberg P.O. Box 3064 LeBoeuf, Lamb, Greene & MacRae, LLP Houston, TX 77253 125 West 55th Street New York, NY 10019 Northern District of California

In re: ) Bankruptcy No.: 01-30923 DM PACIFIC GAS AND ELECTRIC) RPS. No.: COMPANY, a California ) Hearing Date: [?] corporation ) Time: Debtor(ss) ) )

Relief From Stay Cover Sheet

Instructions: Complete caption and Section A for all motions. Complete Section B for mobile homes, motor vehicles, and personal property. Complete Section C for real property. Utilize Section C as necessary. If moving party is not a secured creditor, briefly summarize the nature of the motion in Section D.

(A) Date Petition Filed: 04/06/01 Chapter: 11 Prior hearings on this obligation: N/A Last Day to File §523/§727 Complaints:N/A

(B) Description of personal property collateral (e.g. 1983 Ford Ta

Secured Creditor [ ] or lessor [ ] Fair market value: $ Source of value: Contract Balance: $ Pre-Petition Default: _ Monthly Payment: S No. of months: Insurance Advance: $ Post-Petition Default: $ No. of months:

Fair market value: $ Source of value: If appraisal, date:

Moving Party's position (first trust deed, second, abstract, etc.):

Approx. Bal. $ Pre-Petition Default: $ As of (date): No. of months: Mo. payment: $ Post-Petition Default: $ Notice of Default (date): No. of months: Notice of Trustee's Sale: Advances Senior Liens: S

Specify name and status of other liens and encumbrances, if known (e.g. trust deeds, tax liens, etc.):

Position Amount Mo. Payment Defaults

1' Trust Deed:_ S S $ 2' Trust Deed. $ $ $

(Total) $ $ $

(D) Other pertinent information: ific ber mpany, is seeking relief from the stay to effectuate a setoff of mutual prepetition debts betwee i r C mpany and Pacific Gas and Electric Company.

Dated:

Richard C. JUsephson/ OSB No. 73374 Pt Type Name

Attorney for Pacific L er Company

CANB Documents Northern District of California RICHARD C. JOSEPHSON. OSB 73374 HON. DENNIS MONTALI (Pro hac vice) 2 STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 3 Portland, OR 97204-1268 -i4 Telephone: (503) 224-3380 Facsimile: (503) 220-2480 5 EDGAR B. WASHBURN, Bar No. 34038 WASHBURN, BRISCOE & MCCARTHY, P.C. 6 55 Francisco Street, Suite 600 San Francisco, Ca 94133 7 Telephone: (415) 421-3200 Facsimile: (415) 421-5044 8 Attorneys for Pacific Lumber Company, a California 9 corporation

10 UNITED STATES BANKRUPTCY COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN FRANCISCO DIVISION 13 In re: NO. 01-30923 DM 14 PACIFIC GAS & ELEC TRIC COMPANY, a Chapter 11 Case California corporation, 15 Date: June 20, 2001 Debtor. Time: 1:30 p.m. 16 Place: 235 Pine Street, 22nd Floor Federal I.D. No. 94-07422640 San Francisco, California 17

18 NOTICE OF MOTION AND MOTION FOR RELIEF FROM STAY

19 PLEASE TAKE NOTICE that on June 20, 2001, at 1:30 p.m. or as soon thereafter as 20 the matter may be heard, in the Courtroom of the Honorable Dennis Montali, located at 235 21 Pine Street, 22"d Floor, San Francisco, California, Pacific Lumber Company, a California 22 corporation ("Pacific Lumber"), will and hereby does move (the "Motion"), pursuant to 23

24 sections 362(d)(1) and 553 of the Bankruptcy Code and Rule 4001(a) of the Federal Rules of

25 Bankruptcy Procedure, for entry of an order granting Pacific Lumber relief from the automatic 26

Page 1 - NOTICE OF MOTION AND MOTION FOR RELIEF FROM STAY

STOEL RIVES LLP ATTORNEYS Portlnd2-4308497. 1 0011 155-0(X 900 SW FIFTH AVENUE 0eIpSUITE hone2600 (503) PORTLAND, 224-J380 OREGON 97204-1268 - 1 stay, and other equitable and legal relief. This Motion is based on this Notice of Motion and 2 Motion, the Declarations of Gary Clark and Richard C. Josephson, the records and files in this 3 case and any admissible ""4 evidence presented to the Court at or before the hearing on this Motion. 5 6 By this Motion, Pacific Lumber moves the Court for relief from the automatic stay and 7 alleges: 8 Jurisdiction and Venue 9 1. On April 6, 2001 (the "Petition Date"), Pacific Gas and Electric Company 10 I I ("PG&E" or the "Debtor") filed a voluntary petition for relief under Chapter 11 of the

12 Bankruptcy Code. Pursuant to sections 1107 and 1108 of the Bankruptcy Code, the Debtor 13 has been operating its business as a debtor in possession. 14 2. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. § 1334 and 15 157(a) and United States District Court for the Northern District of California Local Rule 16 4001-1. Venue is proper in this Court under 28 U.S.C. § 1409. This is 17 a core matter within 18 the meaning of 28 U.S.C. § 157(b)(2)(A) and (G). The substantive basis for the relief 19 requested is sections 362(d)(1) and 553 of the Bankruptcy Code. Rule 4001(a) of the Federal 20 Rules of Bankruptcy Procedure is applicable. 21 Facts 22 3. Pacific Lumber and PG&E are parties to that certain Standard Offer #1 contract 23 24 ("SO-i "), As-Delivered Capacity and Energy Power Purchase Agreement dated January 17, 25 1986, as amended (the "PPA"). The PPA provides generally that (i) Pacific Lumber will meet 26 Page 2 - NOTICE OF MOTION AND MOTION FOR RELIEF FROM STAY

STOEL rvEs LIr 900 SW FIFTH ATTORNEYS Porrnd24308497. 1 0011155-00001 AVENUE. TelephoneSUITE 2600 (.503J PORTLAND. 224-3380 OREGON 97204-1268 1 qualif'ing facility requirements and (ii) Pacific Lumber will sell and PG&E will purchase as 2 delivered capacity and energy. 3 4. Under the PPA, Pacific Lumber agrees to produce energy from biomass wood --- 4 and sell the energy to PG&E, and PG&E agrees to pay Pacific Lumber for as-delivered 5 6 capacity and energy at rates authorized from time to time by the California Public Utilities

7 Commission ("CPUC") and which are derived from PG&E's avoided costs as approved by the 8 CPUC. 9 95. As of the Petition Date PG&E was indebted to Pacific Lumber under the PPA in 10 the amount of $5,399,257.05 for energy delivered by Pacific Lumber pursuant to the PPA 11 12 before 9 a.m. on April 6, 2001. As of the date of this Motion, this full amount remains due 13 and owing by PG&E. 14 6. As of the Petition Date, Pacific Lumber was indebted to PG&E in the amount of 15 $128,422.86 for delivery of energy by PG&E to Pacific Lumber's facilities pursuant to 16 PG&E's tariffs, as detailed on attached Exhibit A. As of the date of this Motion, this amount 17 18 remains due and owing by Pacific Lumber.' 19 20

21 ' To preserve its right of setoff, Pacific Lumber has temporarily withheld payment of the amount due pursuant to its rights under Citizens Bank of Maryland v. Strumpf, 516 U.S. 22 16, 18-19, 116 S.Ct. 286, 288-89 (1995). Pacific Lumber promptly notified PG&E and its counsel that while it was not effecting a setoff, it is temporarily withholding payment to 23 preserve its right of setoff pending the resolution of a motion for relief from stay. See letters 24 dated April 30, 2001 from John A. Campbell, President & Chief Executive Officer of Pacific Lumber received by Ivan Marruffo, Senior Major Account Representative of PG&E attached 25 to the Declaration of Gary Clark and letter dated May 1, 2001 from Stoel Rives LLP to James Lopes, Esq. of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, P.C. attached to the 26 Declaration of Richard C. Josephson. Page 3 - NOTICE OF MOTION AND MOTION FOR RELIEF FROM STAY

STOEL RIVES LLP ATTORNEYS 900 SW FIFTH AVENUE SUITE 2600 PORTLAND. OREGON 97204-1268 P nd2-4308497.1 0011155-0 1 Cehone (.SO3J224.3380 1 Argument

2 7. Section 362 of the Bankruptcy Code -provides for the termination, modification 3 or annulment of the automatic stay under certain circumstances. Section 362(d) provides, in "" 4 relevant part, as follows: 5

6 (d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under-subsection (a) of this section, 7 such as by terminating, annulling, modifying, or conditioning such stay 8 (1) for cause, including the lack of adequate protection of an 9 interest in property of such party in interest; or

10 (2) with respect to a stay of an act against property under 11 subsection (a) of this section, if

12 (A) the debtor does not have an equity in such property; and 13 (B) such property is not necessary to an effective 14 reorganization[.] 15 Section 553 of the Bankruptcy Code provides that the Bankruptcy Code does not alter 16 the right of a creditor to offset prepetition amounts owing to it by a debtor against prepetition 17

18 amounts owing by it to the debtor, except in certain limited circumstances, none of which

19 apply here.2 Setoff is allowed where the following conditions are met: (i) the creditor has a 20 21 2 Section 553 of the Bankruptcy Code provides: 22 (a) Except as otherwise provided in this section and in section 362 and 363 of this 23 title, this title does not affect any right of a creditor to offset a mutual debt owing 24 by such creditor to the debtor that arose before the commencement of the case under this title against a claim of such creditor against the debtor that arose before 25 the commencement of the case, except to the extent that

26 (1) the claim of such creditor against the debtor is disallowed; Page 4 - NOTICE OF MOTION AND MOTION FOR RELIEF FROM STAY STOEL RIVES .LLP ATTORNEYS 900 SW FIFTH AVENUE SUITE 2600 PORTLAND. OREGON 97204-1268 Portind2-4308497.1 0011 155-001 Cleeone (503) 224-3380 1 prepetition claim against the estate, (ii) the debtor owes a prepetition debt to the creditor, (iii)

2 the claim and the debt are mutual, i.e. owing to the-same parties in the same capacity, and (iv) 3 both the claim and the debt are valid and enforceable. -'" 4 Pacific Lumber is entitled to relief from the automatic stay to effect 5 a setoff of the

6 amounts owing by it to PG&E for delivery of energy pursuant to PG&E's tariff against the

7 amounts owing to it from PG&E under the PPA. All conditions of Section 553 are met here.

8 First, the debts are mutual: Pacific Lumber has a prepetition claim against the Debtor and owes 9 a prepetition debt to the Debtor. Second, both claims are valid and enforceable. 10 11 WHEREFORE, Pacific Lumber respectfully requests that this Court enter an order

12 (i) lifting the automatic stay to allow Pacific Lumber to set off the amounts owing from it to

13 the Debtor, as described in Exhibit A, against the Debtor's prepetition obligations to Pacific 14 Lumber and (ii) granting such other relief as the Court deems proper. 15 DATED: May 8, 2001. 16 STOEL RIYES LLP 17

19 RSB No. 73374 Attorneys for acific Lmber Company 20

21 (2) such claim was transferred, by an entity other th the debtor, to such creditor 22 (A) after the commencement of the case; or

23 (B)(i) after 90 days before the date of the filing of the petition and (ii) while the debtor was insolvent; or 24 (3) the debt owed to the debtor by such creditor was incurred by such creditor 25 (A) after 90 days before the date of the filing of the petition; (B) while the debtor was insolvent; and 26 -(C) for the purpose of obtaining a right of setoff against the debtor. Page 5 - NOTICE OF MOTION AND MOTION FOR RELIEF FROM STAY

STOEL RivES LLP Portlnd2-4308497. ATTORNEYS 1 0011155-00001 900 SW FIFTH AVENUE$SUIT.E 2600 PORTLAND. OREGON 97204-1268 1 RICHARD C. JOSEPHSON, OSB NO. 73374 (Pro hac vice) 2 STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 3 Portland, OR 97204-1268 Telephone: (503) 224-3380 4 Facsimile: (503) 220-2480

5 EDGAR B. WASHBURN, Bar No. 34038 WASHBURN, BRISCOE & MCCARTHY, P.C. 6 55 Francisco Street, Suite 600 San Francisco, Ca 94133 7 Telephone: (415) 421-3200 Facsimile: (415) 421-5044 8 Attorneys for Pacific Lumber Company, a California 9 corporation

10 UNITED STATES BANKRUPTCY COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN FRANCISCO DIVISION

13 In re: NO. 01-30923 DM 14 PACIFIC GAS & ELECTRIC COMPANY, a Chapter 11 Case California corporation, 15 Date: June 20, 2001 Debtor. Time: 1:30 p.m. 16 Place: 235 Pine Street, 22nd Floor Federal I.D. No. 94-0742640 17 San Francisco, California

19 DECLARATION OF GARY CLARK IN SUPPORT OF MOTION FOR RELIEF FROM STAY 20 Gary Clark declares as follows: 21 22 1. 1 am the Vice President of Finance and Administration of Pacific Lumber 23 'Company, a California corporation ("Pacific Lumber"). I have personal knowledge of the 24 matters set forth herein and am competent to testify thereto. I make this declaration in support 25 of the Motion for Relief from Stay (the "Motion") filed by Pacific Lumber in this case. 26 Page 1 - DECLARATION OF GARY CLARK IN SUPPORT OF MOTION FOR RELIEF FROM STAY SMoEL Rns u, Por nd-4308669.1 0011955-oo 90 SW (HV320PL OE 22 1 2. Pacific Lumber and Pacific Gas & Electric Company ("PG&E") are parics to

2 that certain Standard Offer #1 contract ("SO-i"), As-Delivered Capacity and Energy PTwer 3 Purchase Agreement dated January 17, 1986, as amended (the "PPA"). The PPA provides 4 generally that (i) Pacific Lumber will meet qualifying facility requirements and (ii) Pacific

6 Lumber will sell and PG&E will purchase as-delivered capacity and energy.

7 3. Under the PPA, Pacific Lumber agrees to produce energy from biomass wood 8 and sell the energy to PG&E, and PG&E agrees to pay Pacific Lumber for as-delivered 9 capacity at prices authorized from time to time by the California Public Utilities Commission 10 11 ("CPUC") and which are derived from PG&E's full avoided costs as approved by the CPUC.

12 PG&E further agrees to pay Pacific Lumber for energy at prices equal to PG&E's full short

13 run avoided operating costs as approved by the CPUC.

14 4. As of April 6, 2001 PG&E was indebted to Pacific Lumber under the PPA in 15 the amount of $5,399,257.05 for energy delivered by Pacific Lumber pursuant to the PPA 16 17 through March 31, 2001. PG&E also owes Pacific Lumber for energy delivered between

18 April 1 and 9 a.m. on April 6, 2001. Under the PPA PG&E calculates this amount and

19 advises Pacific Lumber of the amount due with supporting detail. As of the date of the 20 Motion, this full amount remains due and owing by PG&E. 21 5. As of April 6, 2001, Pacific Lumber was indebted to PG&E in the amount of 22 23 $128,422.86 for energy delivered by PG&E to Pacific Lumber's facilities pursuant to PG&E's

24 tariffs and other charges, as reflected on attached Exhibit A. As of the date of the Motion, this

25 amount remains due and owing by Pacific Lumber. 26

Page 2 - DECLARATION OF GARY CLARK IN SUPPORT OF MOTION FOR RELIEF FROM STAY STOEL RrVES LL ATTORNEYS Portind2-4308669.1 0011155-00001 900 SW FIFTH AVENUESUIT.2600Telphne50) PORTAND,24-380 OREGON 97204-1268 1 6. Attached are true copies of:

2 (a) Exhibit A; and 3 (b) Letter dated April 30, 2001 from John A. Campbell, President & Chief 4 Executive Officer of Pacific Lumber to Ivan Marruffo, Senior Major Account Representative 5 6 of PG&E.

7 I declare under penalty of perjury under the laws of the United States of 8 America and the State of California that the foregoing is true and correct. 9 10 DATED: May 8, 2001. 11

12 Gary Clark Vice President of Finance and Administration 13 Pacific Lumber Company 14 15 16 17 18 19 20 21 22 23 24 25 26

Page 3 DECLARATION OF GARY CLARK IN SUPPORT OF MOTION FOR RELIEF FROM STAY STOEL Rrvs uw A'rTORNI•yS 900 SW Portnd2-4308669.1 0011155-0000 FIFM AVENUE U0 0 PORTLAND, OREGON 97204.1269 fekphone (503) 224-3380 EXHiIBIT A

P.O. & E.

FORTUJNA Log Deck-3/7 to 415/01 SoIfmr(Gas)-3/7 to 4/5/01 FLJ-47-1 031 -2I 17-.32 18,697.75 Lumber Mfll(Gas).317' to 4/5/1D FLJ-47-ID0902 Outdoor lighi-3/7 to 4/5/1D WA4.1; 8.00 Scajas3f7 to 4/5101 FLJ-47-11301-3 Dry 88.R4 KOiin-1/4 to 45/510 FL.-47-1046 1-1 MlI-3/15 to 4/13/01 34,041.S7 MLJ-T3-24so¶. 5 43.129.20 SCOTIA By-?roduots0Cf5.e(Gas)-3i7 to 4?/5IO FLJ-33-1,7323-3 47.73 Sales officoe-1O8 0Main SL(Gaa).3i7 to 415101 FLJ-33-8256 Cogen-3/2 1-D 150.33 to 4/2/01 BLJ-NI-I 1001-3 Ma-hine Shop(Gas)4/ to 415/01 FLJ-33-43641-6 2,694.21 8,194.54 CARLOTTA M11-3115 to 4/13/01 MLJT4SOOS2-5 23,614.94

BY-PRODUCTS Hwy 101 & Van Duzen-317 to 415/01' FLJ-44-47502-0 Van Duzen-Storslge-3/7 to 4/5/01 7.29 Hwy 101 FLJ-44-74805-4 5.72 Van Duzen(Offloi)-3/7 to 4/5101 FLJ-44-47602-9 55.15 KWNSE LAND 3 Mile S/Knealancl-3121 to 411 9/1D RLF-23-1 Bees-s 2,51 FORTUNA PURCE4. PROF. '3825 Dysle Loop Rd-311 6 to 4/11/01 NLM-8443 620-e 3.25 CARETAKEFR-MIRANDA Res~toane-C3/2 to 412/01 BL-M-67-476o2..o Ranclh 107.74 House-3/2 to 4/2101 BLM-67-47,a02-a Baurnu Rd.-312 38.18 to 4=V1 SLM-87-475 1248 Barnum Rd. 3M-3/2 to 4/2/01 9.03 BLM-67-47902-7 4.611 MT. PIERCE Mt. Pierce-3/23 to 4123/01 TLJ-51-7924 1-8

(Monthly fee for hooking our systam, up to Pa & =-,s system) 749.15 Monthly fee 3,745.74

TOTAL OF BILLS FROM PG & =-CURRENTLY HOLDING $128,47.2.86 • ;,_ PALCOTHE PACIFIC LUMBER COMPANY P.O. Bcx 37, Sootla, CA 25555 (707) 764--2Z2

April 30, 2001

Via FAX #445-5528

Mr. Ivan Marruffo Senior Major Account Representative Pacific Gas and Electric Company Humboldt District 2555 Myrtle Avenue Eureka, CA 95501

RE: Account No. FLJ 46 08911-3

Dear Mr. Marruffo:

We are in receipt of your service termination notice for this account.

Pacific Gas and Electric Company ("PG&E") was indebted to Pacific Lumber Company ("Pacific Lumber") on April 6, 2001, the date of PG&E's Chapter 11 petition, in an amount in excess of $500,000. We have enclosed a schedule showing the amounts owed by Pacific Lumber to PG&E on that date under its various accounts. By virtue of California law and Section 553 of the Bankruptcy Code, Pacific Lumber has the right to set off the amounts owed by it to PG&E against the amounts which were owing by PG&E to Pacific Lumber on the date of PG&E's Chapter 11 filing. Pacific Lumber has not and is not exercising its right of set off, but is withholding payment of such amounts, as permitted by applicable law, to protect its right of set off. Pacific Lumber will shortly file with the Bankruptcy Court a motion for relief from the automatic stay to authorize the set off. In the interim, Pacific Lumber is not required to pay PG&E the amounts owing as of the close of business on April 5, 2001, and PG&E is not entitled to terminate service for non-payment. Pacific Lumber expects that PG&E will comply with its legal obligations in this respect.

Please feel free to contact me if you have any questions.

Sincerely, THE PACIFIC LUMBER COMPANY

(JfNWA!.CAMPBELL President & Chief Executive Officer JAC:kw

Ourfors'ts,our future - 1Z30yeazrs and.growring 1 RICHARD C. JOSEPHSON, OSB NO. 73374 (Pro hac vice) 2 STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 3 Portland, OR 97204-1268 Telephone: (503) 224-3380 4 Facsimile: (503) 220-2480 5 EDGAR B. WASHBURN, Bar No. 34038 WASHBURN, BRISCOE & MCCARTHY, P.C. 6 55 Francisco Street, Suite 600 San Francisco, Ca 94133 7 Telephone: (415) 421-3200 Facsimile: (415) 421-5044 8 Attorneys for Pacific Lumber Company, a California 9 corporation

10 UNITED STATES BANKRUPTCY COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN FRANCISCO DIVISION 13 In re: NO. 01-30923 DM 14 PACIFIC GAS & ELECTRIC COMPANY, a Chapter 11 Case California corporation, 15 Date: June 20, 2001 Debtor. Time: 1:30 p.m. 16 Place: 235 Pine Street, 22nd Floor Federal I.D. No. 94-0742640 San Francisco, California 17 18

19 DECLARATION OF RICHARD C. JOSEPHSON IN SUPPORT OF MOTION FOR RELIEF FROM STAY 20 I, Richard Josephson, hereby declare: 21 22 1. I am a member of Stoel Rives LLP, counsel for Pacific Lumber Company

23 ("Pacific Lumber") in this case. I have personal knowledge of the matters set forth herein and 24 am competent to testify thereto. I make this declaration in support of the Motion for Relief 25 from Stay filed by Pacific Lumber in this case. 26 Page 1 - DECLARATION OF RICHARD C. JOSEPHSON IN SUPPORT OF MOTION FOR RELIEF FROM STAY STOEL RrvFs LLP ATTORN4EYS Portlndl-2072847.1 0011155-00001M DRAM01115 I 5/1201 4:30 PM 900 SW FIFTH AVENUE eephoneSUITE 2600 f503) PORTLAND. 224-3380 OREGON 97204-126B 1 2. Attached is a true copy of a letter dated May 1, 2001 from me to

2 James Lopes, Esq. 3 I declare under penalty of perjury under the laws of the United States of 4 America and the State of California that the foregoing is true and correct. 5

6 7 DATED: May 7, 2001. 8

9 Of Attorn s for cific Lumber Company 10 11

13 14

15 16 17 18 19 20 21 22

24 25 26

Page 2 - DECLARATION OF RICHARD C. JOSEPHSON IN SUPPORT OF MOTION FOR RELIEF FROM STAY STOMEL RIMS LL Portlndl-2072847.1 S00 sW FIFTH AVENUE SUITE 2600 PORTLAND. OREGON 97204.1268 0011155- l DRAFT: 5n01 4:30 PM eJephone (503) 224-3380 STOEL RIVES

ATTORNEY S

STANDARD INSURANCE CEN1E 90LISW PUTH AVE-N'L7TES=IT 2600 PORTLAND, OREGON 97204-268 Phone (503)224-3380 Faze503)20-2480 TDD (503)22-1-20. Intemt. www.stoeLcom May 1, 2001

RiC.i•ARD C. JOSEPHSON Direct Dial (503) 294-9537 email [email protected]

VIA FACSIMILE

James Lopes, Esq. Howard, Rice, Nemerovski, Canady, Falk & Rabkin, P.C. Seventh Floor, Three Embarcadero Center San Francisco, CA 94111 Re: Pacific Gas and Electric Company - United States Bankruptcy Court

Case No. 01-30923 DM

Dear Mr. Lopes:

We represent Pacific Lumber Company ("Pacific Lumber") in matters relating to Pacific Gas and Electric Company's .("PG&E") Chapter 11 case. Enclosed are:

1. Copy of letter sent by Pacific Lumber to PG&E with respect to service termination notices for non-payment of amounts owing from Pacific Lumber to PG&E as to which Pacific Lumber has a right of set off under 11 U.S.C. § 553 and California law; and

2. Schedule of Pacific Lumber's pre-petition obligations to PG&E.

PG&E was on April 6, 2001 and remains indebted to Pacific Lumber under the As Delivered Capacity and Energy Power Purchase Agreement dated July 17, 1986 in the amount of $5,399,257.05. We are preparing a motion for relief from automatic stay to permit Pacific Lumber to set off the pre-petition amounts owing between the parties. We would ask that: (1) you promptly advise PG&E that, under applicable law, Pacific Lumber has the right to withhold payment of the amounts due to protect its right of set off and that PG&E should not terminate service pending resolution of the set off (we understand that Pacific Lumber's chief financial officer has spoken with PG&E's account representative and been advised that PG&E will not terminate service pending resolution of the set off) and (2) whether, in lieu of

Portlndl-2072345.1 0011155-00001

SrA,'r'u PO~RTLAND VANCOVV'MRWA BOISE SALT LAxz• CITY WASHING'TON, D.C. STOEL RIVESUP

James Lopes, Esq. May 01, 2001 Page 2

requiring Pacific Lumber to file a motion for relief from stay, PG&E would be willing to stipulate to the set off. I look forward to hearing from you at your early convenience.

Ve OU,

Richard C. se on

Enclosures cc: Mr. Gary Clark (via facsimile)

Portindl-2072345.1 0011155-00001